6th Parliament · 1st Session
The President took the chair at 11 a.m., and read prayers.
– Is the Minister representing the Minister of Home Affairs now in a position to answer the questions which I asked the other day concerning the plans for the building of the Federal Capital ?
– The honorable senator’s questions were: -
The following information has been supplied to me by the Department: - 1 and 2. Information regarding the personnel of the Board and some of their qualifications will be found in page 3097 of Hansard, dated 12th November, 1913. furnished in reply to a similar question. Further particulars will be obtained and supplied, if possible, before the House adjourns for the session.
– Has the attention of the Minister of Defence been drawn to the following paragraph in the Melbourne newspapers of this morning in regard to a question given notice of by Mr. Heitmann in the Legislative Assembly of Western Australia?
In the Legislative Assembly yesterday Mr. Heitmann, Government Whip, gave notice that he will ask the Premier if he was aware the military censor had seized the third edition of the Daily Heat on the previous day? If he was aware that cable news had been passed by the London censors before arriving here, and that war news published in the eastern papers had been prohibited here? Also, he asked, would the Premier, as head of the Government, communicate with the Minister of Defence with a view to the appointment of a censor who would appreciate the fact that the people of Western Australia are sane and intelligent ?
Has the Minister had any communication from the Premier of Western Australia? Is it a fact that news censored by the London censor, and appearing in the press of eastern Australia, is not published in the same way in Western Australia ? And, if so, will the Minister see that the people of that State get the same news as to the actions at the front in the present war as the people in the eastern States of Australia and the Old Country get?
– I have not yet received a communication from the Premier of Western Australia. I take it that the question was given notice of yesterday afternoon, and, if so, there has hardly been time to send a communication. The matter has come under my notice in another way, and that is by means of a protest which was forwarded by the West Australian to the newspapers here, and sent on to me. It appears that the complaint made by the Wast Australian as to certain news being censored refers to the same news which was also censored here, so that it applies equally to the eastern and western press
– In what part of. Australia would that message be received - st Adelaide or Sydney?
– I think that it was received in Adelaide.
– And being censored there it ought not to have been sent on to Perth.
– That does not follow, because the censoring is done when the news comes to the newspaper office. The censoring is not done in Adelaide for the eastern or the western press.
– Then the news which came through was censored for the whole of Australia?
– As regards the statement that news which has been censored in England is prevented from being published here, that is simply an assertion by the newspapers. News is censored in England just as it is censored here, but we have no guarantee that a cablegram received by a newspaper here is identical with information which has been censored in England and allowed to be published there. News sent out to Australia does not come from the censor in England, but from the representative of the Australian press there. Therefore it is obligatory upon us to see that the news passes the censor here. As regards the seizure of a third edition of the Daily News, a report has been called for from the censor as to his reasons for doing so.
– Can the Minister assure the Senate that the same war news is published, or is about to be published, in the press of Western Australia as is published in the eastern newspapers 1 He has not answered that question.
– In each State of the Commonwealth we have a staff of censors, who receive similar instructions on which to act. The censors in Western Australia were chosen with regard to their fitness for the duty. They are citizens of the State, and therefore should know their duty. They would not be likely to take any action which would reflect on the people of Western Australia. The question of Mr. Heitmann seems to indicate that they are not permanent military officers, but citizen officers who have been called up for this special duty. The censors have been instructed to, as far as possible, take uniform action in all the States.
– Seeing that in the main the same cablegrams appear in the leading daily newspapers of Australia, and having heard the statement of the Minister that the same specific instructions have been given to all the censors, how was it that the Daily News, of Perth, in Western Australia, was permitted to publish cablegrams which were not permitted to be published in other newspapers in Australia?
– If the honorable senator is referring to the edition of the Daily News, which published information in defiance of an instruction, I would point out that the newspaper can receive a message, and the censor says whether it is to be published or not. We cannot prohibit the newspaper from receiving a message.
– But you do not deliver to the newspaper censored matter.
– The instruction is that such a message is not to be published in the form in which it was received, and if it is so published action will be taken. Judging from the fragmentary reports we have had, what has happened, I think, is that the censor issued an instruction that some news should not bepublished in a certain form, and finally the newspaper published that news in defiance of the instruction.
– Does he not mark it out?
– If the cablegram was censored, how did it get to the newspaper office?
– Apparently the newspaper acted in defiance of the instruction from the censor, and accordingly it had to pay the penalty.
SenatorFINDLEY. - Assuming that the cablegrams received by the Daily News, at Perth, were similar to the cablegrams received by other newspapers in Australia, and that, in spite of the fact that the cablegrams had been censored in other parts of Australia, and censored in respect to the Daily News at Perth, the latter newspaper, in defiance of the censorship, published them, and, as a result a certain edition was seized, I expect that the Minister will take extreme measures, and order further seizures of the newspaper.
– Order ! I ask the honorable senator not to argue the matter.
– In reference to a statement of the Minister that the West Australian had published censored news after being warned that it was censored, I ask him to see whether it is not the practice to-day that where cablegrams are received in Australia, and are censored, the censored portion is not sent on to the newspaper office, and if the censored portion of the cablegram was not sent on to the newspaper office in Perth, how it got there, and how it was available for publication ? If, on the other hand, the newspaper received the message, it is obvious to me that it was not censored, and I ask the Minister if he will inquire into that aspect of the matter.
– I will inquire into the matter, but I remind honorable senators that censored news does not consist only of cablegrams. Fremantle is the first port of call in Australia for the mail steamers, and very often information comes by that means. The press of Western Australia get the news with their ordinary mail, and the censor has to decide whether it is to be published in the form in which it is received.
– Is the Minister aware of the fact that certaincensors are using their powers to suppress criticism on the administration of the Government, which is in no sense of military value or purport, and, if so, is that done with his concurrence ?
– I invite the honorable senator to give me the names of any censors who are acting in that way. If they are doing so, they are proceeding in defiance of a strict instruction issued by myself. In reply to a deputation which waited on me some time ago, and made that statement, I issued a written instruction that censors were not to take any action of that character. If the honorable senator will supply me with the names of any censors who have disregarded my instruction-
– I will give you them.
– And such a statement can be proved, I promise him and the Senate that they will be at once relieved of their positions.
– Can the Minister representing the Minister of Home Affairs tell me whether the Electoral Officers will be debarred from removing from the electoral roll, during their absence from the Commonwealth, the names of soldiers who have gone to the front?
– This point has not previously been brought under my notice, but I understand that a section of the Electoral Act enables a man to practically register his permanent address in the event of leaving his home temporarily. I think it is quite possible that men who have gone to the war may be brought under the provision. At all events,I will draw the attention of the Chief Electoral Officer to the matter, and if possible, the Act will be sympathetically administered in that direction.
Railway Communication With Queensland : Paper
– A few days ago, at my request, some correspondence relating to the connexion of the Queensland railway system with Port Darwin was laid on the table of the Senate. Can the Minister representing the Minister of External Affairs say whether it is the whole of the correspondence outside of the paper to which I previously referred, and, if not, will he lay the remainder on the table?
– A further portion of the correspondence, being a letter from Mr. Glynn when Minister of External Affairs to the Right Honorable Joseph Cook, was laid on the table of the House of Representatives after the recent correspondence was tabled. I beg to lay on the table of the Senate the following paper: -
Northern Territory -
Queensland railway system - Further correspondence re connexion of, with Port Darwin.
– I should like the Minister representing the Minister of Home Affairs to tell me how ordinary pick and shovel men are paid by the Commonwealth. Are they paid lower rates than are paid in and around Melbourne by private employers, which, I understand, are 9s. 6d. and 10s. a day?
– On the spur of the moment, I am not able to give a reply, but I will see that a copy of the rates paid to the various grades of labour is supplied to the honorable senator.
– In the absence of Senator Ferricks, and at his request, I desire to ask the Minister of Defence whether he can give any information regarding the alleged exportation of gold from Australia by Chinese?
– We have communicated with the Governor of the Commonwealth Bank, who has replied -
The Chinese in Australia, more particularly in Queensland, always cash cheques and notes for gold when theyhave remittances to make to China. In order to stop any undue export of gold in this manner, the Bank usually makes a charge on gold given to Chinese. The Governor does not know of any undue requests being made during the last three months.
-Arising out of that answer, I ask the Minister what legal restrictions the Government can impose upon the export of gold by a Chinaman, or by any other person, who wishes to send gold from Australia?
– The Government can, if they think fit, prohibit the export of gold, except as approved by the Minister.
– Under what Act?
– We can prohibit its export under our general powers just as we prohibited the export of sugar.
– Arising out of that answer, I ask the Minister whether, if there were a suspicion that gold was being despatched to China, and that its ultimate goal was Germany, would it be possible to take action to prevent its exportation ?
– Yes. As I have just informed Senator de Largie, if the Government have any suspicion that the ultimate destination of any gold is an enemy country - and we shall make further inquiries into the matter - we will take action to prohibit its export. But we have to recollect that the ordinary facilities for the exchange of currency between different countries must be recognised .
Bill received from the House of Representatives.
Standing and Sessional Orders suspended, and Bill read a first time.
– In moving
That this Bill be now read a second time,
I wish to say that it is not a very extensive measure, although it contains some important provisions. It is a Bill to increase the powers of the Bank. Under the present Act there are some rather severe limitations imposed on the powers of the Bank. It isnecessary and advisable that the Bank should be armed with power to open up branches in any part of the British Empire. We recognise that it is destined to be the national Bank of Australia, the institution which should naturally do all the business of exchange between the various portions of the Empire, so far as Australian trade is concerned. It is the Bank to which traders in other parts of the Empire will naturally look, because, being the national Bank of the country, it is the institution in which they will repose most confidence. Therefore, we are seeking power for the Bank to establish branches outside of Australia. At the present time it cannot even open a branch in Papua. Then we ask for another power, namely, the power to purchase other banks. That, I think, is a very necessary provision, because it may be advisable in the future to acquire private banks which are now in existence. Under the present Act we have no such power. The Government feel that the time has arrived when that power should be vested in the Bank.
– When it should be given to the Governor.
– Yes. Then it is desirable that its authority to raise capital should be increased. At present, that authority is limited to £1,000,000, and it is desired to increase it to £10,000,000. The necessity for doing this arises largely from the provision which is being sought to acquire other banks. If that power is exercised, it is obvious that it may be necessary for the Bank to have a larger capital than £1,000,000. Accordingly, the Bill provides for increasing the capital from £1,000,000 to £10,000,000. I do not know that there is anything else in the measure to which I should direct attention. I commend it to the Senate, believing that it is the desire of this Parliament to make the Bank a thorough success; to make it a strong Bank, which will be of assistance to Australia in the present crisis, and a rock of safety to the financial institutions of the Commonwealth if they should need assistance.
– Will any payment require to be made to any of the States in which a branch of the Commonwealth Bank is opened up? Will the States be paid anything by way of stamp duty? I know that the larger the capital of mining companies the more they have to pay to the State Government.
– I understand it has been held that the Commonwealth Bank is exempt from the payment of stamp duty. That question is now the subject of a test case before the High Court, although it relates only to whether Commonwealth Bank cheques should be subject to stamp duty. The question is such a highly legal one that I tremble to offer an opinion upon it. I should say that, if a State authority cannot tax Commonwealth Bank cheques, it can scarcely tax its debentures or its capital. To a layman, that is bush logic, but whether it is the law or not I cannot say.
, - I have no intention of discussing the very many matters which are involved in a consideration of the position of the Commonwealth Bank. It is a subject which I have no doubt would, under other circumstances, have invited a very spirited debate in this Chamber. But the fact that the Bill has only just reached us renders it impossible, so far as I am personally concerned, to debate the matter with that thoroughness which the very important considerations involved would otherwise demand. However, I cannot allow the Bill to pass without indicating with sufficient clearness the attitude which I feel is the right one to adopt towards it. Before directing attention to some of its provisions I think I may, without saying one word derogatory to the Commonwealth Bank, fairly remind my honorable friends that this measure is very largely an admission of the futility of the predictions which they made in regard to the principal Act when it was introduced. They have since been going around the country declaring that the Commonwealth Bank has done wonderful things, and that it is going to help the Government. Yet here are the Government coming forward to help the Bank. There has not been a single thing which the Bank has done that has been a help to the Government. It has not assisted them to the extent of one penny-piece. That, however, is not the fault of the Bank. It was impossible for it to accomplish impossibilities. A Bank which had no resources was not in a position to extend help to the Government of the country.
– The existence of the Commonwealth Bank made the people in commercial circles fairly confident.
-I scarcely think that anybody can argue that a Bank possessing no capital is a source of confidence and strength to banks which have millions of capital.
– Does the honorable senator say that the Commonwealth Bank has no capital, notwithstanding that all the resources of Australia are behind it?
– It has a capital of £1,000,000.
– Where is it?
– In the Treasury, and available the moment it is wanted.
– If these airy statements rest upon fact, surely there was no need for all the legislation that we have been enacting during the past two or threedays.
– The people of Australia knew that the Bank had all the taxing power of the Commonwealth behind it.
– Where did my honorable friends go for the £10,000,000 which they required to help them ? They did not go to this Bank, but to the much decried private banks.
SenatorFerricks. - The private banks are getting notes for their gold.
– Yes. But the statement has been made that the Commonwealth Bank is helping the Government, because it has all the resources of Australia behind it. Yet it has remained impotent whilst we have received assistance from the private banks, which have been so persistently decried.
– The private banks haveconfidence in it, seeing that they are taking its paper.
– They are not taking its paper. They are taking the paper of the Government, which is a very different matter.
– Surely not.
– I say that if we are going to establish a bank which shall be a national bank in reality, and not merely in name, it should have associated with it the control of the currency. That is one of the serious defects of this measure. The first proposal to which I desire to direct attention is that to vest the Governor of the Commonwealth Bank with power - subject to the approval of the Treasurer - to purchase one or more of the private banks which are doing business in this country. The Minister has stated that the necessity for increasing the capital of the Bank to £10,000,000 arises largely, if not wholly, from that proposal. I desire to point out what that means. By increasing the capital of the Bank to £10,000,000 we shall not enlarge its capacity to make advances in the direction of assisting people. It will merely take up accounts in respect of which advances have already been made. Honorable senators know that there are two or three banks which may be the subject of purchase by the Commonwealth Bank. If we raise the money to increase the capital of the Commonwealth Bank, it will not be in a position to make advances to the people from that amount, because the money will have to be paid over to the shareholders of the bank we purchase.We shall not be enlarging the operations of the Commonwealth Bank, or increasing its facilities to help the community.We shall simply be enabling it to take the place of, and do the business that is now being done by, the directorate of a private bank. It is safe to predict that the strong and established banks will not be sold to the Commonwealth. The only ones, therefore, likely to be purchased are those in a smaller way, and not so well buttressed.
– Lame ducks.
– I do not like to describe any Australian bank in those terms, but there are degrees of banking stability. There are also many degrees in the liquidity or other character of their assets. It will be found, when the purchase is completed, that we have taken over, not the most, but the least attractive institution or institutions doing business in this country.
– But the most dangerous to the prosperity of the community if allowed to struggle on alone.
– I do not see how a weak bank can be dangerous, although I do not apply that term to any of our existing banks, rather regarding them all as at present in a fairly good position. But some of them have, undoubtedly, advanced a large portion of their assets upon nonliquid securities. One whose name is freely mentioned as likely to be purchased by the Commonwealth, has notoriously advanced a large portion of its assets on big pastoral leases, which are undoubtedly non-liquid. Many years ago, when the boom in pastoral properties was on, it extended a considerable portion of its business in that direction, and has never been able to realize upon the securities since. For the Commonwealth Bank to take it over may or may not bo an advantage to the pastoral lessees, but it will not help the Commonwealth Bank, for any money which it obtains under the authority of this Bill, if invested in the purchase of assets of that kind, will not improve its opportunity to lend money to the community.
– It will extend the business of the national Bank.
– But what kind of business ? The Bank was supposed to provide cheaper money for the people. If a bald proposition to start a national Bank to invest money on big pastoral properties had been put forward, no one would hare been more ready to denounce it than the honorable senator.
– The transaction will increase the financial stability of Australia.
– If my honorable friends are satisfied with phrases of that kind I cannot quarrel with them, but I like to look at the bedrock of the business, and for us at this juncture to purchase a bank of the character I have described, or, in fact, any bank, would be an act of financial folly. We have first to borrow money, and this is not an opportune time to do so. At what rate do we expect to obtain it? Yesterday we passed a Bill under which we obtained from the Imperial authorities a loan costing us close on 4 per cent. If we raise £10,000,000 to extend the operations of the Commonwealth Bank, the money will have to he found in Australia. Do the Government think they can raise £10,000,000 here at 4 per cent.?
– It is not intended to raise it all to-day.
– Do they think they can raise it here to-morrow at 4 per cent. ?
– It is not intended to raise it to-morrow. It is to be raised when required.
– It may be required next week.
– Why take such an extreme view?
– Are the Government going to purchase a bank or not?
– We may if opportunity arises.
– Mr. Fisher contends that the Bill is urgent, and the question of the purchase of a bank is a matter of current talk. The very dogs in the street bark the name of one bank, and it is undoubtedly intended to bor row money to purchase a bank provided that the Governor of the Commonwealth Bank can make satisfactory arrangements.
– Do you mean that it will cost £10,000,000 to purchase a bank?
– That would “buy all the banks in Australia.
– There are banks in this country with even a bigger capital than that.
– What two banks in Australia have a capital of £10,000,000 ?
– Senator Gould, who is more familiar with the details of banking business than I am, tells me that I am wrong in that regard. But whether it costs two, three, or four millions, we have, to raise the money, and we cannot raise it here at this juncture at 4 per cent.
– The £1,000,000 of capital that the Commonwealth Bank has at present cost us nothing to raise.
– I do not think it was raised at all. Senator Gould informed me that, taking the market price of the shares, the present capital value of the Bank of New South Wales is about £7,000,000. The subscribed capital is about £3,000,000, but to acquire the bank by purchasing its shares on the open market would cost about £7,000,000. Whatever sum we want will cost us a relatively high rate of interest.
– If the bank cost too much, it would not be purchased.
– Then the Bill is not urgent.
– There is no reason why the power should not be taken.
– On that argument we might as well provide capital enough to buy all the banks. This proposal will not make the Commonwealth Bank in any sense a national one. All we are doing is to start another ordinary commercial bank, for in no sense does the proposal advance the national side of finance, which ought to be the first objective of any bank started under Government auspices. If the money costa us too much, the Bank will have to charge an unnecessarily high rate of interest to those who seek to do business with it, in which case it will not do the business that it was ostensibly established to do. The first effort that should have been made ,was to secure to the Bank the whole of the business of the State Governments, and there was a way in which that could have been done. At a recent Conference between the States and the Commonwealth an agreement was arrived at by which, if the Commonwealth withdrew from the savings bank business, the States undertook to give the Commonwealth Bank all the other business under their control. There are many ways in which, starting from that, a considerable accession of strength and usefulness could have been brought to the Bank, but the Government have started out with a firm determination to ignore the States as far as possible, and to bleed them of resources which they have hitherto regarded as their.,own and largely relied on to carry on their public works. However, I do not expect that anything I can say will affect their decision.
– No ; “ State frights” are pretty dead.
– The honorable senator seems to think that remarks of that kind will settle big problems. I never knew there were any “ State frights,” but whether they are dead or not we cannot ignore the position and responsibilities of the State Governments.
– We can assist them by the note issue and the Commonwealth Bank.
– We shall not assist them by taking from them funds which they have hitherto employed so largely in their public works, but from the tone of the interjections I do not hope to get anything like a serious discussion on matters of such vital importance to the people. It may be right to take these resources from the States, but the consideration of the question is not to be dismissed by such interjections. We ought to have made a strenuous effort - and the opportunity, if grasped, would have taken us a long way on the road to success - to make the Bank a national Bank in the sense of doing the business of the nation, and not merely of the Commonwealth Government. The Government had that opportunity prepared for them. They refused to take it. They insisted on fighting instead of co-operating with the States, and that attitude will be not only to the detriment of the States, but will withhold from the Bank what might otherwise have been a very useful element of much-needed strength.
– Senator Millen concluded bis breezy speech by saying that if the Labour Government had started out with a desire to work harmoniously with the State Governments, there would have been a. greater probability of the Commonwealth Bank becoming a really national bank,, and a much greater success than it is. The fact is that, from the inception of the Bank, and before it commenced operations, the Fisher Government showed their desire to co-operate iu the fullest measure with every State Government of Australia. They offered extremely liberal terms to the State Governments in the matter of the Savings Bank branch of the business of the Commonwealth Bank. The Fisher Government proposed that the State Governments should have absolute control over their assets at the time, that they should receive 75 per cent, of new savings bank business, and that upon the remaining 25 per cent, they should have equal claims with the Commonwealth Government. The State Govern men fs turned down those generous proposals. I believe that the Governor of the Commonwealth Bank, Mr. Denison Miller, as a practical and experienced banker, considered the terms offered to the State Governments too generous. He was surprised at the generosity of the termsoffered by the Fisher Government to theTreasurers of the different States.
– That does not look like a desire to bleed the States.
– On the contrary, it was evidence of a sincere desire to assist the State Governments. It is very regrettable that party animosity and feeling should run so high in the different States to-day, but it is a fact that, instead of the Commonwealth Bank doing what Senator Millen says it is doing, the very State Treasurers who turned down the generous proposals made by the Fisher Government are the persons who are bleeding the citizens of Australia.
– Is Mr. Holman moved by animosity to the Fisher. Government?
– I live at Middle Park, and I am in a position to say that, within a distance of one mile, two substantial buildings have recently been erected by the State Government of Victoria, at a cost of some thousands of pounds, for the purpose of carrying on the operations of the State Savings Bank. I understand that the State Government had to pay about £20 a foot for the land on which the building in Canterbury-road has been erected. It is fitted with lead lights and every modern convenience, and alongside of this recently-erected State Savings Bank there is a branch of the Commonwealth Savings Bank, which was established on the spot before the State Government acquired the site upon which their building has recently been erected. Senator O’Keefe, who lives in St. Kilda, will no doubt have noticed that, during the last few weeks, a valuable site, which must have cost a pretty high price, was acquired by the State Government of Victoria at the corner of Canterbury-road and Fitzroy-street, and immediately opposite the St. Kilda railway station, and on that land a magnificent building has been erected to carry on the State Savings Bank business, although in close proximity there is a post-office and Savings Bank in the hands of the Commonwealth, where all this business could easily have been carried on. In many places in this State thousands of pounds have been absolutely wasted by the State Government in this way. The people of the State are being bled because the members of the State Government are not prepared to work harmoniously with a Commonwealth Labour Government.
-Colonel Sir Albert Gould. - What about the New South Wales Labour Government?
– I am dealing with my own State, and let other honorable senators deal with theirs. Senator Millen has said, in effect, that the Commonwealth Bank lias not done anything since it has been in existence; that it has not. convenienced traders, and has not made the money market more staple. T venture -to say that if it had not been for the existence of the Commonwealth Bank, and the Australian note issue, we should have had a financial crisis in Australia greater than any we have had since the establishment of responsible government here. The Commonwealth Bank is a mere infant that came into existence, so to speak, only yesterday. Still, our opponents are never tired of condemning it, on the ground that it is not a success, and does not do the business which is done by banks that have been conducting banking operations ever since Australia was first settled. What do honorable senators think will be the position of the Commonwealth Bank when it has been in existence for, say, half as long as the Bank of New South Wales ? The Commonwealth Bank must be a’ bigger success than any private bank, because the citizens of Australia are its shareholders, and they will not lo’ok in the same way as the shareholders of private banks for direct dividends. The profits made by the Commonwealth Bank will belong to the whole of the people of Australia. When it started out to do business on a business basis our opponents attempted to arouse the animosity of the people against it. They said, “This Bank came into existence to assist the poor farmers, and those who ave not too well circumstanced in life, when they desire financial accommodation, but it has proposed to assist a financial institution known as the Broken Hill Proprietary Company.” I think that the Governor of the Commonwealth Bank, Mr. Denison Miller, is quite within his rights when he says, in effect, “ This Bank is for basking purposes. I know no party and no individual, and every proposition that comes before me will be viewed impartially. I am prepared to undertake any good business proposition. Whether it be submitted by the Labour party or the anti -Labour party, it will be financed on business lines by the Commonwealth Bank.” I believe the Bank did finance the proposition put before it by the Broken Hill Proprietary Company. When the Bank started on these lines members of the Opposition, for party purposes, and persons interested in other banks and not in sympathy with the Commonwealth Bank, commenced certain moves in another place, and endeavoured to do so here as well. They received little or no consideration, and the people of Australia have treated their moves with the contempt they deserve. Has not the Commonwealth Bank done something ? I read in the financial column of the Argusprior to the last Federal election, that a big mine in Northern Queensland had ceased operations, with the result that 900 men were thrown out of employment. The mining company endeavoured to secure financial assistance from private banks, and was unsuccessful. It then applied to the Commonwealth Bank, and under the heading of “ Stocks and Shares “ in our daily newspapers, I read that the Commonwealth Bank had financed the company, and so had enabled about 1,000 men to be continued in employment.
– We may depend that the security was good enough.
– Absolutely. The Commonwealth Bank has rendered assistance to other companies and industries in Australia, when probably some of the private banks were indisposed to do so. There is not the shadow of a doubt that this Bank has given confidence to the people which they would not have had but for the note issue and the existence al this ‘financial institution. That people have absolute confidence in financial institutions guaranteed by Governments has been recently exemplified in the Old Land. Prior to the outbreak of the war it was the custom of people bo say, in a casual way, and often in a serious way, “It is as safe as the Bank of England.” This always implied that a Bank of England note was one of the safest securities in the world. What has happened recently? The British Government have been issuing paper money. It should be known to Senator Gould, and to others who think like him, that a number of people who possessed Bank of England notes made haste to change them for the notes which were being printed and circulated by the British Government. This shows conclusively that people have always more confidence in institutions behind which there is a Government guarantee than they can possibly have in private institutions. Before we took over the note issue in Australia, the private banks issued their own notes, and were taxed for doing so, but since the issue of our Australian notes there is not a single person in Australia who has had any doubt at all about the value of a .£1 note. What would have happened if a Labour Government had not taken over the note issue ? When the war broke out, and the drought was upon us, if the private banks had still been issuing their notes, it is very probable that in some quarters there would have been a feeling of grave anxiety and a rush upon some of the banks. Once that took place, there would probably have been a financial panic. I repeat that no one to-day questions the value of an Australian note, because it is a Commonwealth note and not one issued by a private bank.
Senator Lt.-Colonel Sir Albert Gould. _ The honorable senator says that people like the Australian note because they know that they can go to the Treasury and get gold for it.
– That is not the reason so much as the knowledge that behind the Australian note there is the unlimited power of taxation of the Commonwealth Parliament and the whole of the resources of Australia, and there is also a certain gold reserve. Besides all this, an Australian note is legal tender. If I owed a debt to Senator Bakhap of £1 , and tendered him an Australian note for £1, and he refused to take it, the debt, from a legal point of view, would be paid, because the honorable senator would have refused a legal tender.
– T. think the honorable senator’s law is a little hazy.
– I know that an Australian note is legal tender, and that any one who refuses legal tender must put up with the consequence.
– But not exactly the consequences the honorable senator has indicated.
– I speak as a layman, and am open to correction. If I offered the honorable senator legal tender in payment of a debt and he refused to accept it, be could demand nothing else from me.
– I have every faith in the future of this Bank if it is well and economically managed. I have no fault to find with the provision for opening up new branches in Australia and different parts of the world, because I think Chat every facility should be given to the Governor in that direction. But I do not know that I can wax enthusiastic about the provision empowering him to acquire banks which might be in deep water. I, like Senator Millen, am convinced that no bank which is doing well is likely to approach the Governor of the Commonwealth Bank, or to be in any way desirous of being taken over by that Bank. If we approve of that provision in the Bill silently we may find ourselves in later years well within a danger zone, for the reason that the management of the Bank is intrusted to one man. I was a member of the Government which passed the
Commonwealth Bank Bill, and consequently it would be wrong on my part to take any exception to it; but we must not forget that the management of the Bank is intrusted to one man, and that if we give to that one man the powers specified in this measure he can, under regulations, acquire other banks. Why should we acquire other banks unless such acquirement would be to the advantage of the Commonwealth Bank ?
– It might be for other reasons; it might be to save the credit of the Commonwealth.
-I am not seriously concerned in that regard at the present moment. My concern is the success and the welfare of the Commonwealth Bank, and if there are in Australia banks which are not too well placed, to use an Australianism, that is not the fault of the Commonwealth Bank. If it is, it shows that the Commonwealth Bank must have been a success even up to the present time. If it be true that private banks during the last year or two have not been carrying on their business on too profitable a basis, the operations of the Commonwealth Bank may have affected them. If its operations have affected one or two banks during the last year or two, and that is the reason why we are asked to agree to a provision for the enlargement of the capital from £1,000.000 to £10,000,000, a similar application may be made from time to time to acquire bank after bank, and I should say to pay compensation for taking over the banks. Are we to have any voice in regard to the banks which are to be taken over, and the manner in which the transfer is to be carried out? Are these matters to be left wholly and solely to the Governor of the Commonwealth Bank and to the Treasurer of the day? Personally, I would have preferred to see the Commonwealth Bank proceed on the lines on which it is going. If it happens to eliminate competitors, it can only do so by efficient and economic management. Any firm, or company, or institution that carries on its business efficiently and economically deserves to succeed. If the Commonwealth Bank is doing that, I see no reason why it should acquire businesses and pay compensation for them. We know that when competition is eliminated in different directions there is no payment to those who have been dispossessed. In Melbourne, a few years ago, we had cabs running through the streets. Later, the Tramway Company was formed, and tram communication was provided for the people of the metropolitan area, and the cabs were wiped out. Before the Tramway Company laid down their lines and started to run services, did they approach the owners of the cabs, the saddlers and harness-makers, and dealers in fodder, and say, “ We are about to run tram services, and, no doubt, you will be severely handicapped by our competition, but before we wipe you out we will compensate you”? Did the Government of Victoria, before they started to build locomotives at Newport, say to the Phoenix Foundry at Ballarat, “ As we are about to start to make our own locomotives and to seriously interfere with your business, we will pass an Act to acquire your business or to compensate you for any loss you may sustain by reason of our action”? No. Why, then, I ask, should any Government give to the Governor of the Commonwealth Bank power to acquire banking institutions which may be on their last legs because of its competition ? If the Commonwealth Bank succeeds - and it must succeed against all competitors - the more capital will be required, according to the provision in this Bill, to acquire other banks. The Commonwealth Bank should proceed as it is doing now, and if there are in the Commonwealth banks which are not doing too well, the fault is not with the Governor of the Commonwealth Bank, but with the individuals who are always upholding private enterprise and claiming that the Government cannot run institutions successfully. I think that, having said these things-
-Colonel Sir Albert Gould. - You will vote for the second reading.
– I will vote for the second reading of the Bill, because I would sooner have the Commonwealth Bank than all the other banks in existence, from a citizen’s view-point, and also in the interest of the future progress of Australia.
– If the Commonwealth Bank wiped out a private bank by competition, do you think it would bs a good thing for the credit of the Commonwealth that the private bank should be shut up ?
– If the Commonwealth Bank shuts up a competitor, that will demonstrate that it is managed more efficiently and economically than is the private institution. The bank which is run on these lines is entitled to all ihe success which comes its way.
– Even if it knocks out a competitor? ,
– Yes ; the race is to the swift in every sphere of human activity. A successful business very often knocks out a number of competitors.
– But the credit of the Commonwealth is involved.
– The credit of the Commonwealth is behind the Commonwealth Bank.
– But it is not a good advertisement for private banks to be wiped out by competition.
– Some private banks would have failed, and failed badly, a few years ago had it not been for the credit of Australia being brought to their rescue.
– You are opposed to the credit of the Commonwealth, through the Commonwealth Bank coming to their rescue now.
– That is hardly a proper way of putting it. My main reason for speaking was that, if we are going to do this every time that our competition becomes serious in regard to private banks, we will probably be called upon to increase our capital in order that the shareholders and everybody else connected with a bank not doing too well shall get every penny to which they think they are entitled. We do not find that that is done in other lines of business. We do not find that that was done, as I was saying before Senator McKissock returned to the chamber, when the Government of Victoria started out Vo make locomotives in opposition to the Phoenix Foundry of Ballarat.
– You do not need to repeat that argument.
– I am not repeating it.
– We are going to finish up to-day.
– That does” not concern me.
– It should concern you. Other people have a right to be considered.
– Because we are going to close up to-day, is that any reason why my mouth should be shut and why I should not be permitted to express my views in regard to a Bill which is of importance, not merely to myself, but to other citizens?
– It is a very good reason why you should not repeat an argument.
– Order i I point out to Senator Findley that nobody knows whether the Senate will close up to-day. The matter is entirely for the Senate itself to decide. So far as I could catch the interjection of Senator de Largie, he was not striving to limit the remarks of Senator Findley, but was only pointing out that apparently the time at our disposal was limited, and that the honorable senator should not repeat remarks for the benefit of an honorable senator who had come into the chamber. Now that my attention has been called to the matter, I must remind Senator Findley that it is contrary to our Standing Orders and practice to indulge in repetition.
– Senator de Largie was usurping your privilege.
– I was not trying to usurp any privilege.
– I do not desire to run counter to you, sir, or the Standing Orders. It was merely to emphasize and amplify a point I was endeavouring to make that I attempted to repeat some remarks, because I was prompted to do it by a pertinent interjection from Senator Ferricks. I do not desire to take up more time, but I feel that a Bill of this kind deserves the serious consideration of the Senate, and no measure that we have had, during the last few days, at any rate, concerns me more than this does. With some of its provisions I am in hearty accord, but I cannot become by any means enthusiastic in regard to the provision which empowers the Governor of the Commonwealth Bank to acquire other banks and the provision which enables the capital to be increased.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [12.14]. - I do not propose to speak at great length, because I realize that time is precious and that other honorable senators desire to express their views. The Bill makes certain amendments of the principal Act. Personally I do not see any ground for objecting to the proposed amendments, when we take into consideration the whole principle and scope of that enactment. One of the less important proposals of the Bill is that to empower the Commonwealth Bank to establish branches in any part of the British Dominions. I do not object to that, because, inasmuch as we have established a Commonwealth Bank, it should enjoy every facility that is enjoyed by a private bank to enable it to deal with its own business. Another provision reads -
A trustee, executor, or administrator may invest any trust moneys in his hands in the purchase of debentures issued by the Bank, or on fixed deposit in the Bank.
I do not object to that provision, nor do I take exception to the amendment which is proposed in section 62 of the principal Act. The chief matter which we have to consider is the position of the Bank, which is of a three-fold character. In the first place, it should be a National Bank - that is, a Bank which transacts the whole of the business of the Governments of the Commonwealth. The Commonwealth, having established a Bank of its own, should strengthen its hands by doing all its own business through it, so long as the Bank does not encroach upon ground which the States have already traversed. By all means let the Bank deal with the national accounts. Then we have to consider the question of the Commonwealth Savings Banks. Here there has been considerable difference between the States and the Commonwealth as to which Savings B anks should transact this particular form of business. We all realize that the State Savings Banks are in reality national banks. They have no hungry shareholders to appease by paying them dividends, and consequently they are able to carry on their operations with a minimum of expense. When Senator Findley talks about the action of Victoria in setting up a Savings Bank in apposition to that established by the Commonwealth, he should recollect that it was the Commonwealth which endeavoured to oust the State Savings Banks from the business which they had previously transacted. I come now to the third aspect of the Commonwealth Bank, which relates to the competition into which it has entered with the ordinary private banks of the country. If it is going to compete with those institutions, I say unhesitatingly that it ought to be subjected to the same conditions as those to which our private banks are subjected. Then we should not hear of cases coming before the High Court for decision similar to that which is now occupying the attention of that tribunal. In effect, the Commonwealth has said to the private banks, “ Although you have to pay stamp duty upon every cheque that is drawn by your customers, the Commonwealth Bank is not going to pay any such tax, because it is an instrumentality of the Commonwealth.” Need I point out that in reality it is not the private banks which have to pay the tax of a penny upon every cheque drawn by their customers - it is the customers themselves. It will be seen, therefore, that the Commonwealth Bank occupies an advantageous position as compared with our private banks, which have to contribute to the revenue by way of stamp duty on cheques.
– That duty ought to be abolished.
-Colonel Sir ALBERT GOULD. - If it suits a man to become a depositor in a private bank, it is only fair that he should pay a small tax to the State should the State require it for the government of the country. If the Commonwealth Bank is going to compete with private banks it ought not to occupy a different position from that occupied by those institutions. I come now to the proposal to empower the Commonwealth Bank to absorb any private bank. It has been urged that it will absorb only institutions which are in a “ lame “ position. Still the amount which will be paid by way of compensation to any private bank for taking over its business will be absolutely determined by the value of that business.Now, in a rough-and-ready way. we know how the public appraise the value of a bank. We all recognise that a bank’s shares may be selling either at a premium or a discount. If they are selling at a discount that circumstance is indicative of the value which the public put upon the institution. It may have a capital of £1,000,000, but if its shares are selling at a discount, the Commonwealth Bank will purchase it only upon reasonable terms. Of course it is possible that the Commonwealth Bank may acquire a private bank which has a large number of branches established throughout the country. In that case it will be able to step into those branches immediately, and that will be a great advantage. That the Commonwealth Bank should enter into competition with our State Savings Banks is unreasonable. Of course, if the latter were prepared to surrender their business, the position would be different. Similarly, if the Commonwealth Bank chose to open Savings Banks in places where private banks have not been established, I would not utter a single word by way of complaint. But we have to divest our minds of the exaggerated idea which has been expressed by some honorable senators regarding the value of the services which the Commonwealth Bank has rendered to the community. Let us compare its position with that of our private banks. I find that the annual report of the Commonwealth Bank for the year ended 30th June, 1914, states -
The affairs of the Bank were subjected both in the Commonwealth and in London to complete inspection, and audit for the half-yearly period ended the 30th June last, with the result that a net profit of £8,093 8s. 5d. was earned by the Bank during the six months, in addition to £1,547 9s. 4d. shown as profit for the preceding six months, or £9,640 17s. 9d. for the whole financial year.
That shows the very small profit which the Bank has made during the period that it has been in existence. Its deposits, accrued interest, and rebate amount to £4,559,264, depositors’ balances in the Savings Bank department, with interest accrued, to £4,645,268, making a total, with contingent liabilities, of £9,773,690.
– Is that the Savings Bank side alone?
– No. The assets are shown to be: Coin, bullion, and cash balances, £2,670,446 ; bank premises, £38,379 ; profit and loss, £36,995. Now, let us see what are the deposits in our ordinary banks. In 1913 the deposits in the banks of issue in Australia totalled £154,500,000, as against deposits in the Commonwealth Bank of £9,000,000. The coin and bullion held by the private banks at that time totalled £33,684,000. I have some still later figures which I can furnish to honorable senators. During the September quarter of the current year, the Commonwealth Bank held in coin and bullion only £151,390, whereas the private banks held no less a sum than £35,264,000. The Commonwealth Bank had made advances to the extent of £1,550,000 as against advances made by our private banks amounting to £118,000,000. I have quoted these figures to show that honorable senators opposite are mistaken when they declare that the Commonwealth Bank has been the means of steadying the financial position in this country, and that it has assisted our private banks. I do not quote them for the purpose of decrying the Commonwealth Bank, but merely for the purpose of illustrating the extravagant ideas which are entertained by some honorable senators. I come now to the question of notes. The Commonwealth Bank does not control the note issue, although I believe that ultimately it will do so. Senator Findley stated that in Great Britain the public are so anxious to get paper money into their hands that they are taking Government paper money and giving sovereigns in return for it. But I would point out that the Bank of England does not issue notes of less than £5 in value, and that there is great difficulty in getting such notes changed except at the Bank itself.
– The honorable senator is in error there.
– I happen to have had a little experience. The British Government are now issuing notes of the value of 10s. and £1, because they are more convenient than are notes of a larger denomination. To a great extent these notes of small value take the place of the half-sovereign and sovereign. If I did more than refer briefly to certain provisions in this Bill I should be obliged to take up considerable time - a course which I do not propose to follow at this stage of the session. Let me disabuse honorable senators’ minds of the idea that the other banking institutions are in any way dependent upon the Commonwealth Bank. As a man interested in private banks, I have no objection to the Commonwealth Bank doing its business so long as it is placed on exactly the same footing as the others. I know that if I wanted an overdraft, I would have to pay the same rate of interest and put up the same amount of security with one as with the other. This is only natural when we place a bank under independent control as we intended to place the Commonwealth Bank. It may be true that the control of one man is not sufficient, and it may be desirable to appoint some one else to act with him in regard to certain general principles, although matters of detail and matters as between the Bank and its clients should be kept within the knowledge of as few individuals as possible. It would be undesirable to make the Treasurer a director of the Bank to such an extent that he would have to make himself familiar with all the intricacies and details of its business, because Treasurers come and go, continuity would be destroyed, and public confidence in the secrecy of the Bank’s relations with its customers would be to some extent destroyed. People in a large way of business who have to go to a bank to obtain money, do not want all the details of their business made known to persons not primarily interested in the control or management of the institution. We know this Bill is going to be passed, and that it is useless to attempt to improve or add to it. Our only consolation is that many of the amendments proposed are very necessary, and that a number of safeguards are provided in relation to the absorption of any private bank. The Treasurer has to be consulted and to approve, and the Auditor-General has to make a report. I am sure that great care will be exercised in any transaction of the kind, or I sincerely hope it will be. In any case, I trust that we shall take every care to keep the Bank as free as possible from political control, and to insure that, when it comes into competition with other institutions, it shall be placed on exactly the same footing with them as regards taxation or other obligations. I do not think there is any obligation to put up a certain sum before a bank can be established, and, even if there was, we should not expect the Commonwealth to be called upon to do it: but, in all other respects, the Commonwealth Bank and the private banks should be on an equal footing. We have established a Bank which has behind it no capital except the power to raise certain money. We are now going to extend that power so far as to enable it to raise a capital of £10,000,000 instead of £1,000,000, and we must be careful that that power is not used detrimentally to the best interests of the community. I should have liked to say something as to the desir ableness of placing thenote issue under the control of the Bank, but as others desire to speak I shall not pursue the subject now. I may have an opportunity to discuss it in the general debate on the financial proposals of the Government.
– We cannot do full justice to an important measure of this kind in the restricted time available at this stage of the session. I am glad that an effort has been made to give our Bank a wider scope of operations, and, therefore, of usefulness to the people. Senator Millen referred to the apparently small amount of capital that it possesses, and apparently he regards the private banks as being of much greater magnitude from that stand-point. I was surprised to hear the figures the honorable senator first gave. He reduced them a little later, but he apparently still has an exaggerated idea of the capital of the private banks. According to Mr. Knibbs’ most recent Year-Book, the private banks from the stand-point of capital are very small potatoes compared with what the Commonwealth Bank will be when this scheme is carried out. Senator Millen said the capital of the Bank of New South Wales was £7,000,000.
-It is £3,500,000. but the 20s. shares are selling to-day at 40s.
– The capital of the Bank of New South Wales is only £3,250,000.
– I did not say its capital was £7,000,000. I said its total value as a purchasable proposition was £7,000,000.
– The capital of all the banks in Australia combined is about £29,000,000.
– You could not buy them for the amount of that capital.
– The shares of the Commercial Banking Company of Sydney are selling at a premium of more than 100 per cent.
– That opens up another question. I was simply referring to the paid-up capital of the banks. Comment has been made on the very small capital of the Commonwealth Bank, but it does not follow that a bank with a capital of £3,000,000 has three times the amount of influence on the finances of Australia possessed by a bank with a capital of only £1,000,000. The bank that has the confidence of the people behind it, and the credit of the whole nation to back it up, is much more powerful than a bank whose sole capital is expressed in millions of money. Gold may be very valuable, but public confidence is an even greater asset. The importance of the Commonwealth Bank is, therefore, not to be measured by the size of its capital, but as we propose to increase its capital to £10,000,000, we shall be making it by far the greatest bank in Australia, as none of the other banks has a capital even remotely approaching that amount. We may confidently look to its management to utilize the increased capital to the very best advantage. If that is done, the Bank must do an enormous business. Even now, with merely a nominal capital of £1,000,000, it is doing a big business. We have been challenged to name the benefits which have accrued to Australia from the establishment of the Commonwealth Bank up to the present time. It has done, perhaps, more to improve the working conditions of the clerical workers than anything else in recent times. The poorest paid clerical workers in this country up to the time the Commonwealth Bank began operations were bank clerks, and the fact that we have been able to give them better wages and working conditions would be in itself sufficient to justify the establishment of the Bank, even if there had not been many other good effects flowing fromits creation. Since the war began, the existence of the Commonwealth Bank has created a sense of confidence in the banking institutions of Australia that they never had before. We can recall the banking panic of 1893; and in the present crisis we had all the elements of another. The fact that there has not been the slightest breath of anything of the kind is due to the establishment of the Bank by a Labour Government, with a Treasury note issue to back it up if necessary. The continual attempts of our political opponents to belittle the Bank have done them more harm than anything else I can think of. It has been about the most unpopular thing they could have done. From their standpoint it has been very bad political business, and I am surprised that men, so astute in other ways, have fallen into, and persisted in, the error. There is no denying the fact that they are hostile to the Commonwealth Bank, because their very criticism shows it, and they seem quite to forget that the Bank is an institution of which the people as a whole are proud. We have twenty-two private banks, and if it had been proposed to establish a twenty-third on the same basis, there would not have been a word of criticism or fault-finding. All the criticism has arisen from the fact that the twenty-third bank is a Government Bank. One would almost think, to hear members of the Opposition talking, that the Commonwealth, with its enormous business interests, had not a perfect right to establish a bank, if for no other purpose than to do its own business. One would imagine that it was an impertinence on the part of the people to take any part in the banking business of the country. I hope the increase of the capital of the Commonwealth Bank to £10,000,000 is only the first step towards making the banking business of Australia a Government monopoly in the hands of the Commonwealth Bank. The most economical banking is banking on a large scale.
– Does the honorable senator not think that it is better that the Commonwealth Bank should justify itself by successful competition with the other banks rather than by being given a monopoly of banking?
– The Commonwealth Bank will be justified by its competition with the other banks, and the sound business it will be able to do. It may take longer than some of us anticipated a few years ago, but I am satisfied that in. the course of time the Commonwealth Bank will displace most, if not all, of the private banks in Australia. Itis only necessary to secure common-sense in its management, and as surely as the sun will rise to-morrow it must, as time goes; on, absorb all the other banks in this, country. It might interest honorable senators to know the number of banks operating in other countries as compared with the number in Australia. The United States of America possess a much larger population and greater wealth than we can claim in Australia, but I may inform honorable senators that there are no less than 20,000 banks doing business in the United States. That will give some idea of the comprehensive nature of the banking system of that country. These banks have an aggregate capital of something like £2,400,000,000. They include, of course, all kinds of banks. My contention is, that they would be much more sound if the number were cut down by half. The most expensive system of banking is that carried on by small banks. By banking on a large scale the gold reserves cau be accumulated at one centre. It is the fact that the Bank of England holds the gold reserves of all the other banks of the United Kingdom that makes its position so secure. I say that in the same way we should make the Commonwealth Bank powerful by making it the holder of the gold reserves of all the other banks in Australia. Banking cannot be carried on nearly so economically where each bank, no matter how limited its operations, holds its own gold reserves. There has long been a popular superstition that the Bank of England is a national bank, and it is that which accounts for its strength. As a matter of fact, the Bank of England is a private bank conducted for profit in the same way as any other bank in the United Kingdom. The only difference is that it has a charter from the Imperial Parliament, which gives it powers that are not possessed by the other banks.
– Can the honorable senator imagine a bank that would not be run for profit?
– Yes, I can very easily imagine a bank which, like our Railway Departments and the Post and Telegraph Department, would be run for the convenience of the public and to extend their business facilities. It is generally assumed that Bank of England notes are as good as gold, but whenever a financial panic has arisen in the Old Country the Imperial Government have had to rush to the rescue of that powerful institution. This has been largely due to the fact that the Bank of England notes have been considered as good as gold, and of more value than are notes of the Bank of France or of the banks in other countries. The fact that notes of the Bank of England are redeemable in gold at the
Bank has really led in the Old Country to a belief that bank notes are not as good as gold, and so in a financial crisis people holding paper currency rush to convert it into gold.
– The fact that Bank of England notes are redeemable in gold has made London the centre of credit for all the world.
– The Bank of France does not leave itself open to be taken advantage of in the same way, and as a result it is in a far sounder position than is the Bank of England. Time and again the Bank of England has had to ask for the assistance of the Bank of France, because of the run upon the gold reserves accumulated in its vaults, a thing which could not happen in the case of the Bank of Prance.
– Why is London the centre of the world’s trading settlements?
– I question very much whether it is. I think that the honorable senator will find if he looks into the matter that the Bank of France is in a sounder position than is the Bank of England. If there is a run on the Bank of France, the institution can shut down, and refuse to convert its paper into gold. The notes can be redeemed at will when the Bank considers it safe to redeem them. It has very seldom refused to convert paper into gold, but the fact that it has the power to do so at any time greatly strengthens its position. I have said that the practice of the Bank of England has been to encourage a popular belief that paper money is not as safe as gold, and this has led to rushes on the Bank in a time of financial crisis. The practice of the Bank of France, on the other hand, creates public confidence in the safety of its notes. People become accustomed to the paper currency, and have every confidence in it. I should like to see a similar practice adopted in Australia. It is a waste of wealth to have sovereigns, or even half-sovereigns, in circulation. We should have more paper money, and conserve our gold, and make the best possible use of it for the benefit of the countryIf this course had been followed in the past in Australia we should be in a much better position than we are in at the present time. I agree with some of the criticisms as to the present management of the Commonwealth Bank. I have not a single word to say against the Governor of the Bank, Mr. Denison Miller. I think that we have secured in him the man best fitted for the task with which he has been intrusted. But I think that there should be a Board of Control appointed by this Parliament. It should be of a non-party character, and should consist preferably of the President of the Senate and the Speaker of the House of Representatives, or of one or two members elected by this Parliament. Such a Board would be a great help to the Governor of the Bank. “ Many men, many minds,” and in banking, as in everything else, two or three heads, are better able to think out a matter than is one. I am sure that it would be a matter of satisfaction to the Governor of the Bank if, in times of difficulty,he was in a position to refer to the members of a Board of Control. This course is followed by the best banks in other countries, and by the Bank of France, for which I have a great admiration, and the Governor and DeputyGovernor of which are appointed by the Government in the same way as the Governor of the Commonwealth Bank.
– Are notes of the Bank ofFrance worth as much in foreign countries as are Bank of England notes?
– I do not know that the notes of the banks of any country are of very much value outside that country. Paper currency is sufficient for internal trade, but for international trade it is necessary to have gold.
– That is precisely why international settlements take place in London - because the gold basis is strictly adhered to.
– The fact is that the gold basis is not strictly adhered to in Loudon, and we had proof of that at the commencement of the present war. The subject with which this Bill deals is a very alluring one, and if the measure had not been delayed until practically the last day of the session, I am satisfied that a number of honorable senators would have been glad of the opportunity to address themselves to it.
– I shall be very brief in my remarks. A great deal is made of the fact that certain members of the party to which I belong have criticised the consti tution of the Commonwealth Bank. I have never, during the whole of my political career, said a word against that Bank. I recognise that the possibility of the establishment of such a Bank was contemplated by the framers of our Constitution. If the Liberals who framed the Constitution had not conferred upon this Parliament its powers of legislation in connexion with banking, there could be no Commonwealth Bank; and how will the charge lie against the party which provided the foundation for the establishment of this Bank of being hostile to the institution itself ? No ! What members of my party have done has been to criticise its constitution. They have not been hostile to the establishment of a national bank, and the criticism has not been confined to members of my own party. I think it has been indulged in by a gentleman who professes to know a great deal of banking. The Hon. King O’Malley speaks in terms of great depreciation of the institution.
– I invite the honorable senator to read the newspaper report of the debate in another place only so late as last night.
– I know his views on the Bank.
– He, of course, is in favour of a national bank, and so is the Liberal party, but it differs from the Labour party in regard to the necessary provisions to make it a sound and allembracing institution. I give this measure my support, but I venture to say that it is singularly unsatisfactory to go in for the absorption of institutions which are not prepared to continue in the banking business. I remember reading some time ago a book called Monarchs who have Retired from Business. They had retired from business for the simple reason that they were given no opportunity of continuing it: they were dethroned monarchs.
– Would you allow these banks to go out of business?
– I would allow any failure to go out of business, for the law of the survival of the fittest insures that only those who are fitted to continue shall survive. The honorable member has expressed the hope that eventually we will make a national monopoly of banking. I hope we shall do no such thing, for although I have plenty of good will towards our national institution, I hope to see it make itself strong, and so justify itself in competition with other hanks. What have the poor other banks done? We have heard a great deal about patriotism, a. great deal about the contributions to funds which have been established for the national benefit during this time of crisis. The associated banks have, quite recently, come to the assistance of the Commonwealth with a loan of £10,000,000 in gold. That sum, I have no doubt, could have been used by the banks in connexion with the development of the resources of Australia, and in all probability it would have been returning something m the way of 6 per cent.- that is, £600,000.
– Are not the banks using the £10,000,000, or its equivalent in notes, in assisting to develop the country ?
– They could have used the money if they had not thought fit to come to the assistance of the Commonwealth, and could have got at least 6 per cent, on it during this time of stress. In my opinion they have made the Commonwealth a present of £600,000, a sum which, in the aggregate, exceeds that of all the funds which have been established for patriotic purposes within the last four months.
– Order I The Bill does not lend itself merely to a eulogy of the banks for any action they have taken, but to an amendment of the principal Act. I ask the honorable senator not to go into a long statement of what other banks have done.
– Very well, sir, but at the same time I respectfully call your attention to the fact that other banks have been alluded to.
– I always allow the honorable senator to make a casual reference by way of illustration, and there is no objection as long as it is not too long.
– Very well, sir. I resent unfair criticism of the private banks just as I resent unfair criticism of the Commonwealth Bank. I deny the allegation that the Liberal party is hostile to this institution. I, for one, have not said a syllable against it. I know that a large number of politicians hope to see the Commonwealth Bank established as a sound and satisfactory institution, and the rest of the criticism which has been advanced from time to time is that there has not been an amplification of its powers, and that the spirit of cooperation with the States has not been observed. There has been no criticism of the institution itself. I, with Senator Findley, express a hope that there will be the closest criticism of any financial institution which the Commonwealth Bank is intended to absorb. When an insurance company seeks absorption at the hands of a greater institution, the natural inference is that the business of the former is not in every respect satisfactory. That inference I think I may be permitted to draw in connexion with institutions which desire to go out of business permanently. I hope that the greatest circumspection will be exercised in regard to the absorption, by the Commonwealth Bank, of any other financial institution within the limits of the Commonwealth. I hope that the capital will be given to the Bank. I have no quarrel with the Bank, nor has the Liberal party as a whole, because it is the party that provided the foundation for the erection of the structure. But I will say the final word against the idea in the minds of some gentlemen that paper is entirely satisfactory as a means of circulation, and that the people should be advised to allow any Administration to indulge in the issue and circulation of paper that has not a substantial gold backing. I have been recently in a country where paper was at a discount. The people of that country have the keenest knowledge of banking. They understand how to make money by exchange. They are an industrious commercial people, but had got it into their heads that theirs was an unsustained paper issue. During my journey in that country I was able to purchase for a note - a note issued by a bank in Hong Kong, exchangeable only for silver - three notes of assumed equal value issued by the Provincial Government of the country, that is to say, the notes were only interchangeable at a discount of 66 per cent. I admit that people, if they have confidence in the fact that they, may get gold or silver for a note, will be content with paper. But let them get the idea into their head that on presentation a note will not be paid in gold or silver, and there will be a calamitous result. While I agree with. Senator Findley’s remarks as to the care we must exercise so far as the absorption of other banking businesses by the Commonwealth Bank is concerned, I sincerely deprecate the inferenceI drewfrom other remarks he made to the effect that we could at any time, because of the resources of this country, issue paper, which perhaps, in the long run, would have an insufficient gold backing. The resources of a country are not sufficient to give people confidence in a paper issue. They must have confidence, not only in the resources of a country in a general way, but in the resources of its Government to give them metallic money in exchange for paper which has been issued with the sanction of authority. I support this measure, and I dissociate myself from any expression of hostility towards the Commonwealth Bank. I insist that the Liberal party has not at any time criticised the Bank in an unfriendly spirit, but it does desire to sec recrimination cease. It desires to see hostility on the part of the National Administration towards the financial necessities of the States cease. It is known to honorable senators opposite that the State I assist to represent fell in with a proposal of the Commonwealth authorities in connexion with the savings bank business. We had to do it because that business in Tasmania was conducted through the medium of the post-office. We would have had to find hundreds of thousands of pounds to provide institutions for State banking.
– We were not silly enough to do it, like Victoria.
– That is so. As Senator Gould has pointed out, we were engaged in this business first, and the man in possession does not like to be dispossessed. We wanted the money - for what purpose ? The State was continually advancing the money it derived from the Savings Bank to the farmers to provide for the development of its landed resources to encourage the young men to go on the land. There was a natural spirit of reluctance on the part of the State authorities to see the whole of the savings bank business pass straight away to the Commonwealth. They wanted some guarantee that they would have control of a large amount of the money which is provided by the thrift of the people to develop our landed resources. There is no spirit of hostility to the Bank in the Liberal ranks. We wish it well, but we desire care and the spirit of co-operation to be exercised in connexion with all our natural opportunities.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Sit tingsuspended from1.30 to 2.30 p.m.
Clauses 2 to 10, and title, agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended, and Bill read a first time.
– In moving -
That this Bill be now read a second time,
I wish to say that it is merely intended to cover up an illegal action, if I may so term it. Section 6 of the Australian Notes Act provides that in the issue of Australian Notes those notes are to be issued and dated from the Commonwealth Treasury. Now, it has been the practice of some of the banks to date their notes, and for others not to date them. Some Commonwealth Notes were issued without a date. The attention of the Government was drawn to the fact, and as it raised the question of whether they were legal tender, it was decided to amend the Act by the omission of the words “and bear date at.” The Bill is purely a formal measure.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended, and Bill read a first time.
– In moving
That this Bill be now read a second time,
I merely wish to observe that it is intended to rectify an anomaly which exists in our Public Works Committee Act, al- though when the measure was drafted that anomaly could not have been foreseen.
– Is not the Bill intended to meet an emergency rather than to correct an irregularity ?
– It is designed to correct an irregularity which has arisen, but which could not possibly have been foreseen. Section 15 of the Public Works Committee Act provides that works begun before the Committee were appointed should not be referred to it. Now, although the Act was passed in 1913, the Committee have only just been appointed. Consequently a number of works passed in the Estimates of 1913-14, and already begun, could not be referred to the Committee, as that Committee did not exist. The Committee now having been appointed it is proposed to refer to them the works which the Act says shall be referred to them, but it is not possible, without this Bill, to refer to them the works which have already been commenced.
– Does that mean that no works will be referred to the Committee in this calendar year?
– No; certain works have already been referred to them. Those are the Federal Capital Site and the buildings at the Westernport Naval Base, with the question of the water supply for that Base. The honorable senator will, perhaps, wonder why those matters did not come before us, but the Act provides that the resolutions shall be submitted only to the House of Representatives.
– As one of the members of the Public Works Committee I can assure the Senate that this is a necessary measure. The circumstances have arisen through the terms of the Act under which the Committee was appointed. It provides that work exceeding £25,000 in value must be referred to the Committee for report. It was recognised that, owing to the suspension of the sittings of Parliament until April, those works might not be proceeded with, and that there was a certain amount of unemployment which should be minimized by the Government wherever reasonably practicable. It has been proposed by members of the Committee, as well as by the Government, that the mere fact that we have passed a
Bill to provide that no works exceeding £25,000 in value shall be proceeded with without the authorization of the Public Works Committee should not militate against the chance of minimizing unemployment. The Prime Minister has taken the Committee into his confidence regarding certain works, and asked the Committee to inform him what works they deem necessary to be more fully considered by them. Those are being formally remitted to the Committee by resolution by the House of Representatives. The original Bill requires that those works shall be so remitted, but the intention of this Bill is to provide that there shall be no interruption of public works development on account of the Christmas vacation, except in relation to works which the Committee have already indicated as properly remittable to them. The Bill is the outcome of a consultation between the Prime Minister and the Committee. It is well within the purpose which both parties wish to achieve, and the Senate will run no risk in passing it.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment.
Bill returned from the House of Representatives with an amendment.
Standing and Sessional Orders suspended.
Clause 14 (Exemptions from training in time of peace).
House of Representatives’ amendment -
After the word “ paragraphs : - “ insert the following paragraph: - “and [da) Persons who are employed ina civil capacity for any purpose in connexion with the Defence Force (whether subject to the Commonwealth Public Service Act 1902-191 3 or not), or in any factory established in pursuance of this Act.”
– I move -
That the amendment be agreed to.
The object is to exempt from training in times of peace the classes of persons referred to who are employed in the Defence Department. A number of difficult positions are created by the fact that the Department has to employ persons liable for military training. Those persons are really carrying out military service, and if they can be called away, the Department which is responsible for the military defence of the Commonwealth may practically be hamstrung. Considerable confusion is also caused by the fact that some of those persons already hold honorary rank as military clerks, and if .called on for military training may be given rank in the Forces also. A most peculiar set of conditions may arise, and may even arise if they are not given rank in the Citizen Forces. A military clerk who is an honorary captain by reason of his position in the Department may be a private, corporal, or sergeant in the Forces. The main point, however, is that the compulsory provisions of the Defence Act can cause, and have at times caused, a dislocation of the administration of the defence organization by taking men away from defence work for defence training. It is, therefore, considered desirable, and never more desirable than at a time like this, that those employed in the Defence Department should be exempt from the compulsory training provisions of the Defence Act.
– I am sorry I cannot fall into line with the Minister in this matter. We are asked to take a distinctly retrograde step. This is a proposal for times of peace, and it is only in times of peace that it ought to be considered. In a time of war other conditions prevail. We must guard in this country against, not only the creation of a caste with military privileges, but even the suspicion that an effort is being made to create it. I suggest that this is such an effort. I see no reason why a clerk who, in ordiary times of peace keeps his ledger or records in. the Defence Department, should not give hia afternoons for training in the same way as a clerk in private employment. The Minister says inconvenience is caused, but it is caused also in every private factory in the country. There is always power to exempt on special occasions, and we certainly should not grant to these lads a privilege not enjoyed by their fellows in private employ.
– It is not done for their convenience, but the convenience of the Defence Department, which is in a very different position from private employers.
– In a time of war a different set of conditions obtains, but the Minister himself said that the amendment was to operate in times of peace.
What inconvenience is caused to the Department in times of peace by one of its junior clerks having to do his drill on Saturday afternoons the same as others?
– He may not be a junior clerk.
– Whatever his age, it corresponds with that of the man in a similar position outside who is doing his duty. When the Defence Department ask everybody to fall into line and sympathetically support the compulsory training movement, they should’ not say “ All you people in private employment must do your duty, but those employed by us are to be exempt from these extra departmental duties.” Physical improvement has always been urged as one of the chief advantages of universal training, and if there is anything in that argument these boys in the Defence Department should not be deprived of it. The Minister referred to the anomalies that might be caused if some one in the Department was junior to another to whom in the camp he became senior, but yesterday the Senate unanimously applauded Senator Keating’s statement that, in one tent in a military camp, a number of privates were under the direction of a sergeant who, in private life, had been shearing for two of them.
– You do not quote me correctly. I said he might be junior to himself.
– These things are inevitably associated with a Citizen Army.
– I referred to a man holding an honorary rank* in the Department becoming a corporal or private in the Citizen Forces.
– I see no difficulty about that, beyond consideration for the man’s dignity. If citizens who to-day are in the position of employers feel no loss of dignity when to-morrow they go into camp and place themselves under the orders of one whom they previously directed, I see no reason why clerks in the Defence Department should be allowed to stand on any different footing.
– If that were all there is in the amendment it would never have been brought forward.
– Still, the Minister has put that forward as one of the reasons for the amendment. The matter was pressed upon my attention when I was in the Department. There was some evi- deuce that many of the departmental officers wanted to escape the obligation which the young men of the country generally are compelled to fulfil.
– I do not think that that is quite fair. It was not put to me by the civil officers, but by the military officers.
– Never mind who put it forward, we shall discuss it on this basis. I ask the Committee to consider whether it is fair that these lads who, because of the positions they occupy and their hours of work, are envied by many outside, should be exempt in times of peace from a liability which we have decreed shall fall generally upon the young men of this country. I see no reason for this exemption. It has a very unsavoury aspect, inasmuch as it must create an impression outside that those who are fortunate enough to be employed in the Defence Department will enjoy privileges which are denied to others. If we are going to have a compulsory system, let us have it. If at any time the calling out of these young men for training would be inconvenient to the Department, the Minister has ample power under the existing Act to exempt them from training, as he frequently does in the case of those in private employ. I am sorry that the measure should have been brought forward at this period of the session, because I feel that it is now impossible for the matter to be as fully considered as its importance deserves.
– I am sorry that the Leader of the Opposition should have attached so much importance to what I said about rank in an effort to introduce a little humour into the discussion. Although this has reference to training in time of peace, that training goes on in time of war also. I take the case of men employed in the small arms factory at Lithgow. We have a large number of young men working there. It might be necessary to call out the regiment in that district for mobilization. These young men are doing very important work in manufacturing small arms. We might call them out for a camo of training, because such camps are held in time of war as well as in time of peace.
– The honorable senator knows that employes in such positions are exempt from mobilization; the men at Cockatoo Island, for instance, are exempt.
– Not legally. There is nothing in the Act to permit of their exemption.
– It has been done.
– A great many things are done, but it is better that they should be done legally. We might bring in an amendment of the Act to exempt such employes in time of war. I confess that I am more concerned about their exemption in time of war than about their exemption in time of peace. Section 138 of the principal Act deals with exemption from training in time of peace, and I remind honorable senators that under that section we have exempted persons employed in the State Police and Prison Department. They are exempt even in time of peace, and all that we are asking here is for the same exemption in respect of our own employes. This proposal would not apply to senior cadets. Senator Millen’s references to boys lead me to think that the honorable senator is under the impression that this proposal applies to cadets. It applies only to the Citizen Forces mentioned in paragraph b of section 138 of the principal Act. I am asking only for the same exemption of employes of the Defence Department that we have already made provision for in the case of the employes of the State Police and Prison Department. With the exception of the factory operatives, the bulk of these are under military discipline and are part of a military organization. If men employed in factories under the Defence Department are called out for camp training they will have a divided duty. On the one hand, they must keep the factories going; and on the other, they must attend a camp of training. Senator Millen says that we can exempt them from going into camp, but we have no legal authority for doing so. If we could do so without legal authority in time of war, we could do so in time of peace. If it is to be done it should be done under statutory authority. If a company were established at Lithgow, I venture to say that three-fourths of it would be comprised of men engaged in the Lithgow Small Arms Factory. If the company was called out in time of war, only one-fourth would respond, as the other three-fourths would necessarily be kept at work in the factory. I am as much opposed to unnecessary exemptions as Senator Millen can possibly be, and I would not permit men to escape military training merely because they happened to be employed in the Defence Department. Senator Millen is aware that there have been cases where it has been found necessary to strain the law to prevent its interference with the performance of other defence obligations by officers of the Department. A further Defence Bill of a more comprehensive character must be introduced next year ; and I can promise honorable senators that, if the operation of this measure is found to exempt men whose training would not interfere with the carrying out of the work they perform for the Department they will be once more brought under the compulsory training (provisions. I desire only to extend the exemption to individuals whose callings in time of peace or in time of war might seriously interfere with the operation of the machine necessary for carrying on the defence of the country.
.- Honorable senators are handicapped to some extent in considering this Bill, because the amendment proposed refers, first of all, to section 14 of the Act of 1914, which, in its turn, refers to section 138 of the principal Act, which deals with persons who are within the exempt conditions but out of the exemptable conditions.
– The honorable senator is not referring to the Defence Act. He must go back to section 138 of the principal Act.
– I take it that these persons are not absolutely exempt, but are exemptable
– No; the persons referred to in section 138 of the principal Act are exempt, and it is now proposed to exempt the persons referred to in the amendment now before the Committee.
– I am prepared to take the assurance of the Minister that there would be no undue exemption to the officers mentioned in the amendment if the matter were left to him. If they are to be made absolutely exempt, however, we should hesitate about agreeing to the amendment. To exempt them absolutely would be wrong. One reason why I think so is that that would at once differentiate between those em ployed in the Defence Department and persons in private employ, and it might very easily be said that those in the Department are very ready to impose upon others laws which they are not prepared to obey themselves. If these officers were made exemptable by the Minister, I should be prepared to accept his assurance that there would be no derogation of duty on their part that was not sanctioned by the requirements of the Department.
– After the Minister’s assurance, I think it ought to be possible to adjust this matter in a few minutes. The Minister has shown that he does not desire to exempt from military obligation those who might be called upon to go through their training without detriment to the work of the Department. I have no doubt that the amendment would make it legal to exempt the civil employes of the Defence Department. I should like to suggest a way out of the difficulty which would conform to the views expressed in this debate and to those which the Minister has just enunciated. By the insertion at the beginning of the amendment of the words “ Subject to the Minister’s approval,” we should make it competent for the Minister to say whether any particular class in the Department could attend military trainin? or could not. That would enable the Minister to give effect to the view which he says he holds.
– I propose to meet the honorable senator’s view, but not in the way he suggests, because those are paragraphs which deal with absolute exemptions. Paragraph 4 of clause 14 deals with cases where the Minister may give an exemption. I propose to insert a new paragraph, and therefore I ask leave to withdraw my motion.
Motion, by leave, withdrawn. ‘
Motion (by Senator Pearce) agreed to -
That the amendment of the House of Representatives he disagreed to. and consequent thereupon the following new paragraph be added to clause 14: - “ 5. The Minister may, by order under his hand, exempt persons who are employed in a civil capacity for any purpose in connexion with the Defence Force (whether subject to the Commonwealth Public Service Act 1902- 1913 or not), or in any factory established in pursuance of this Act.”
Resolution reported ; report adopted.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended, and Bill read a first time.
– I move -
That this Bill be now read a second time.
The Bill is very brief, and practically explains itself. Its object is to raise the standard from 35 to 45 per cent. overproof in regard to Australian standard malt whisky and Australian blended whisky. The Customs Act provides for the maturing of whisky in two years, but it has been found that with the standard fixed at 35 per cent. the whisky contains so many impurities that it is impossible for it to mature in two years. It is believed that by altering the standard to 45 per cent., the whisky will be purer, better, and more marketable article and will mature in the time prescribed by the Customs Act. It is considered that this amendment of the principal Act will give Australian whisky a better chance in the markets of Australia.
– In other words, if it is not matured in two years, you leave the two years standing, but take it unmatured.
– It would be a good marketable article.
– But not so good as it was before.
– It is said that with the standard fixed at 35 per cent., it is impossible to remove all the fusel oil in two years.
– The remedy should be to give it a longer time.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 -
Section 3 of the Spirits Act 1906 is amended -
Section proposed to he amended -
In this Act, unless the contrary intention appears - “ Australian Standard Malt Whisky “ means whisky which complies with the following requisites: -
.- The effect of the clause will be to lower the standard of Australian whisky.
– That is a very serious matter.
– The Minister has said very clearly that the effect of the amendment will be to allow whisky to go out in two years, although it has been proved by experience that in that time it does not come up to the standard adopted. So that, rather than call on the holders of whisky to hold it a little longer, the clause, in effect, lowers the standard. Although it may be a great advantage to the holders and the manufacturers of whisky, I think that, on the whole, it will be a detriment to the people of Australia, and I am perfectly certain that, in years to come, it will be injurious to the trade itself, by giving to Australian whisky a lower standard and reputation than it should enjoy.
– It is quite possible that when the standard was fixed at 35 per cent. an injustice was done to an Australian industry. We take it that that really was done at the time, although done with the best of intentions. Senator Millen, I am sure, will not mind me quoting a memorandum from the experts of the Department, who, I tate it, are not interested other than to see the development of Australian industries -
Thu raising of the strength of distillation in the case of harley malt whisky from 35 per cent, to 45 per cent, over-proof is necessary, in order to permit of the production of a whisky which would mature within a reasonable time.
In the case of a whisky distilled at a strength of 35 per cent, over-proof, the product contains an excess of by-products such ad fusel oil, with the result that a much longer period than that provided in the Tariff item, viz., two years, would bc required to produce a potable spirit, and even then it is doubtful if the spirit could he used for other than blending purposes.
I think that most honorable senators who believe in Australian industries want to see Australian whisky put to a better purpose than that of blending with other whiskies -
Distillation at a strength approaching 45 per cent, over-proof permits of the elimination of the crude by-products and of the production of a cleaner spirit, which will mature within a period of two years.
It is considered that with the distillation strength restricted to 35 per cent, over-proof it is practically impossible to produce a whisky which could be sold to the public under its proper description; such whiskies would he usable only for blending with other whiskies.
If the distillation strength is raised to 45 per cent, over-proof there is reason to believe that local distillers would be able to produce a whisky which could be sold on its own merits.
We can produce whisky, and the desire of the Government and the Department is that a preference should be given to Australian whisky, and that it should not be used merely as an appendage to imported brands. I can quite understand the view taken by Senator Millen. It worried me a good deal when I first saw the Bill; but, after inquiry among the experts of the Department, I considered that the reasons they gave to me were quite sound.
– This is a case where the Minister should have invited the Senate to make a practical examination.
– I have no objection to inviting honorable senators to test the article on the adjournment of the Senate for a Merry Christmas.
– I hope that the suggestion I am going to make to the Minister will be taken in a proper spirit. I do not think that any information which has been given to the Senate can give us an assurance that, so far as the public are concerned, the Bill is required. It may be required from the departmental view ; but their case is not very strong as presented in the memorandum read by the Minister. I do not think that advantage should be taken of the fact that this branch of the Legislature is ready to sanction a good deal of work that is dealt with in the other House, and, perhaps, dealt with there rather rapidly. I ask honorable senators to consider whether it is right to pass a measure of this kind on the little information which has been furnished. The only justification for the measure seems to be a departmental one; but that does not seem to be a very strong one. It certainly does not appeal to me, nor do I think that it appeals to any honorable senator. I am quite prepared to recognise that, in matters of this kind, the Department and the Minister must introduce measures to bring the law into certain lines to carry out what is the obvious spirit of the community; but I do not think that we have heard anything to justify this Bill being rushed through the Senate, and unless honorable senators are satisfied that there is some justification other than that which we have heard, we would be quite justified, I think, in asking the Minister to defer the consideration of this clause until we meet again, and to let us have a Merry Christmas in the meantime.
– I do not know whether the measure is urgent or not ; but Senator Millen is quite right in stating that its effect will be to reduce the quality of whisky manufactured in Australia. I cannot say whether I am right or wrong; but, apparently, there is an arrangement between the Department and the manufacturers of whisky to make up to them for what the Department should have done. In my opinion, the Customs Department should have afforded our Australian whisky distillers more protection than they now enjoy. When the duty upon imported whisky was raised, the Excise duty should not have been increased to the same extent. This Bill apparently represents an effort to overcome that mistake by allowing Australian distillers to supply the public with inferior whisky. I do not think that that is a right course to pursue.
– Is it possible to sell a lower standard of whisky than that represented by imported whisky?
– Our Act renders it imperative that Australian distillers shall manufacture malt whisky and mature it in wood for two years. If these distillers were granted an increased measure of protection they could afford to mature their whisky - distilled at 35 per cent, overproof - in wood for a year longer, and then the public would obtain a much better local article than it now gets, or than is imported.
– I yield to no man in my desire to encourage the establishment of Australian industries, and I see no reason why the whisky-drinking public should not be supplied with Australian whisky. But I would be the last to suggest that encouragement should be afforded our whisky distillers to produce an inferior article. Everything that Australians manufacture should be of the very best quality. If this Bill represents an attempt to encourage our whisky distillers because they have not enjoyed a sufficientmeasure of protection, I say that the Government are going the wrong way to achieve their object. Is the matter one of such urgency that its consideration cannot wait until the Tariff is being dealt with in a general way ? I recollect that on a previous occasion the distillers of Australia were singled out for special consideration. Our agricultural implement makers and our distillers were selected for special treatment because they urged that if Parliament did not go to their rescue their industries would be strangled. Apparently the whisky distillers of the Commonwealth have only to make known their desire in order to assure that desire being granted. I say that they are entitled to no more consideration than is any other manufacturer. I agree with Senator Story that the measure represents an attempt to extend protection to our whisky distillers who are dissatisfied with the protection they at present receive. If we pass the Bill, the quality of the whisky produced in the Commonwealth will not be as good as it is supposed to be to-day. Seeing that we are nearing the festive season, when the weather is usually warmer than is that experienced during the winter months, and when whisky is not so largely consumed, it appears to me that this matter cannot bo one of extreme urgency. Before granting special consideration to our distillers at a time when the importation of spirits is more limited than it was a few months ago, we should consider the position very carefully. The matter, I repeat, is not one of urgency, and I see no reason why the Australian distiller should be singled out for special consideration. Seeing that the Bill will affect the consumption of Australian whisky, we ought to hesitate before we pass it.
– In view of the expressions of opinion by honorable senators, I thought that the Assistant Minister would have endeavoured to meet the general desire. But as he apparently intends to force the measure through this Chamber, there is another argument that I propose to address to the Committee. By interjection just now the honorable senator endeavoured to institute a comparison between imported and Australian whiskies. As we are now invited to raise the strength of whisky from 35 to 45 per cent, overproof, I would like to ask what are the figures in regard to imported whiskies. As I understand the position, they still stand at 35 per cent. In other words, our Australian whiskies are to be of lower quality than are imported whiskies. Until further information, upon this matter is forthcoming, I hope that the Bill will not be pressed. Seeing that the existing Tariff has been in operation for two or three years, and that no complaints have been received under this heading, I would suggest that the consideration of the measure should be deferred until we meet again.
– The intention of this Bill is to increase the measure of protection which has been granted to Australian whisky.
– Why are the distillers singled out for special treatment?
– The assumption that the Government intend to reduce the standard of whisky ought not to be accepted for a moment. Whilst I am not prepared to say that Australia is a large consumer of whisky, there is, nevertheless, a fair quantity of that spirit consumed in this country, and the consumption of Australian whisky in (proportion to the total whisky consumption suggests that our distillers have not been sufficiently protected. It is exceedingly regrettable that whisky drinkers turn up their noses at the Australian article. From the very best information obtainable, I gather that this is chiefly due to an excess in Australian whisky of the by-product known as fusel oil. In framing the existing Tariff, Parliament fixed a period within which whisky has to be matured in wood, namely, two years. It has been conclusively proved that Australian whisky will not mature in wood in that period.
– The remedy is to make it three years.
– That may be so. We have endeavoured to stimulate the whisky industry by granting it the ordinary measure of protection, and have failed to do so. Now the Government propose to add to the quantity of Aus-, tralian whisky that is consumed by the community by the method that is outlined in this Bill.
– Why should the distillers be singled out for special treatment every time that we have to consider the Tariff V
– No person in Australia will be permitted to sell liquor which will be injurious to public health. I hope, therefore, that the Bill will be allowed to pass.
– I am just as anxious to extend protection to our local distillers as is any honorable senator, but I think that, under this Bill, that object will be achieved at the expense of the consumer.
– At the expense of the quality of the whisky.
– Undoubtedly the measure.will permit the distillers to place an inferior brand of whisky on the market. The Australian distiller is already handicapped in that he is obliged to distil malt whisky, and to compete against imported whiskies which contain 70 per cent, of grain spirit.
– This is part of the Excise law, and is in operation to-day.
– Justice has not been done to the Australian distiller, because the Excise is just as much as is the import duty. Under the Bill it is proposed to allow the local distiller to overcome this injustice by passing it on to the consumer. I am just as anxious to (protect our Australian distillers as I am to protect other manufacturers. But I believe that we can afford them more effective protection in another way.
– If the honorable senator is going to introduce these matters he will open up a day’s discussion.
– Consideration of the 15111 should be deferred until the general Tariff is under review.
.- I am not opposed to the establishment and encouragement of Australian industries. It is extraordinary that the distilling industry should be singled out for special consideration. What is the explanation ? Since we passed the last Tariff seven years ago our distillers have been enjoying the protection given by it, and now, on the eve of an adjournment, we are asked to consider a measure giving them further protection as a matter of urgency. Why is it urgent ? Has the necessity just been discovered? There is a shortage in our importations, mainly owing to the war, and that ought to be sufficient encouragement to our distillers ; but, not satisfied with that, they want Parliament to allow them to make and sell whisky at 45 per cent, instead of 35 per cent, over-proof. I am curious to know why the Bill is introduced. Are we to understand that it is to give greater protection ? Are the distillers in such desperate straits that they cannot wait, as everybody else has to do, until the Tariff is considered next year?
– Even if I withdraw the Bill, the 45 per cent, provision is now the law, and will remain the law, because of the resolution tabled in another place.
– Where, then, is the necessity for this Bill ?
– It is merely to allow the Senate to indorse the action taken by the Minister in the House of Representatives.
– Then we should not be asked to waste our time in discussing it.
– I am satisfied to withdraw the Bill; but it is understood that the new provision still remains the law.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended, and Bill read a first time.
– I move -
That this Bill be now read a second time.
The object is to continue the existing Act for eighteen months, until 31st December, 1915, in continuation of the policy of giving a bounty to the iron industry. An additional £30,000 is provided for the purpose, but whereas the bounty was previously 12s. a ton, it now becomes 8s. a ton. Under the old Act, manufacturers were not allowed to use any scrap iron in the production of pig iron made from Australian ore for the purpose of claiming the bounty, but under this Bill it is provided that the bounty may be granted so long as not more than 6 per cent. of scrap iron is added. The bounty may be withheld by the Minister if the standard of wages paid is lower than that determined by the President of the Federal Arbitration Court, and if at any time Parliament imposes an import duty to protect the iron industry this Bill will simultaneously cease to operate. No new principles have been introduced.
Question resolved in the’ affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 -
– The Committee should have some ex planation of this extraordinary definition, allowing the admixture of 5 per cent. of scrap iron in the manufacture of pig iron from Australian ore. We have iron deposits in a number of States which have never been previously worked, and we should encourage their use, and not the use of iron or steel which has been produced elsewhere.
– I understand that it is not claimed that the pig iron will be rendered superior in any way by the using of a small quantity of imported iron; but the market is limited, and the industry has not reached a stage at which it can be kept going in full blast. Old scrap iron, including old horse-shoes, and, I believe, even old nails, is available, and the manufacturers do not think the use of a limited quantity should disqualify them from getting the bounty. The Government think that, in order to help the Australian industry, it is as well to be a little generous in that regard by not preventing the manufacturers throwing a few old horse-shoes into the smelter.
Clause agreed to.
Clauses 4 to 15, schedule, preamble, and title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in this Bill.
Message received from the House of Representatives, intimating that it had agreed to the amendments made by the Senate in this Bill.
– We have to await another message from the House of Representatives, and I think that in the meantime we might dispose of a motion which will give honorable senators some idea as to when they are likely to be called upon to assemble here again.
– A motion which I hope will not excite any violent hostility.
– I think that it is likely to he adopted unanimously. I move -
That the Senate, at its rising, adjourn until Wednesday, 14th April, 1915, unless Mr. President shall, prior to that date, by telegram or letter addressed to each senator, fix an earlier day of meeting.
Precedents are very valuable in connexion with such matters, and there is one precedent in this Parliament for a motion of this kind, giving power to the President to summon honorable senators at an earlier date than that mentionedin the motion, should that appear to be necessary.
– As a matter of curiosity, the Minister might say what the precedent was?
– When we were dealing with the Tariff in 1901-2, Mr. Deakin submitted a similar motion in the House of Representatives, giving Mr. Speaker a similar power.
– A most business-like proceeding.
– At the present time we axe in a much more serious position, and, owing to the war, the necessity of summoning both Houses of this Parliament at an earlier date than the 14th April next might arise. I think that this is a convenient time to say that, speaking for my honorable colleagues and myself, we desire to return to you, sir, the Chairman of Committees, the Temporary Chairmen and honorable senators generally, our sincere thanks for the courtesy and kindness that have at all times been extended to us. Though the session has been a short one, we have passed some valuable legislation. The consideration meted out to the members of the Government in the Senate has been such as to justify us in feeling grateful to honorable senators on both sides. I should like also to bear in mind the work of the officers of the House and the Hansard staff, who have at all times carried out their duties well and given us every assistance. May I, in conclusion, wish you, sir, the Chairman and Temporary Chairmen of Committees, honorable senators generally, the officers of the House and the Hansard staff, a Merry Christmas and a Happy New Year. I trust that we shall return early in the new year reinvigorated. I express a hope, which I am sure finds an echo in every heart, that we may return under happier circumstances, that the cloud which now lies over the Empire may by that time have lifted, and that brighter days may be in store for everybody.
– I rise for the purpose of indorsing and reciprocating the remarks which the Leader of the Government in the Senate has been good enough to address to us. The Senate is under an obligation to you, sir, for the assistance and guidance you have given it on all occasions, and for the kindly control you have exercised. Our obligations extend also to those in subordinate positions in the Senate. I can only say it must be a source of satisfaction that, however much we may differ” in political views during this session, although some contentious measures have been presented for our consideration, there has been no evidence of any personal illfeeling amongst honorable senators. I therefore, with additional pleasure and sincerity, extend to my honorable friends opposite, on behalf of all the honorable senators on this side, those very kindly seasonal greetings which Senator Pearce was good enough to extend to us.
– Before putting the motion I desire, first of all, on my own behalf, to thank the Minister of Defence and Senator Millen for the kindly references they have made to me and to the conduct of business in the Senate during the session. I have endeavoured to discharge the duties devolving on me as fairly and as impartially as I could, and to protect the interests and rights of every individual senator. If I have in any way fallen short of that ideal, it has not been from any want of will to attain it. I shall always do my best to maintain good relations between the members of the Senate. I thank honorable senators for their kindly assistance and cordial co-operation, which has made what would otherwise have been an onerous task a light and pleasing duty. On behalf of the staff of the Senate, who cannot express their opinions on the floor of this Chamber, I thank the Minister of Defence, Senator Millen, and honorable senators on both sides for the kindly way in which the; have been referred to, and for the kindly treatment which has always been meted out to the officers and servants of the Senate and the Hansard stall. From my close association with them, I am in a position to say that no Legislative Chamber could be better served than the Senate has been by the officers and servants of the Senate and the Hansard staff. They have at all times been most willing to place themselves at the disposal of honorable senators, and to do all they possibly could to assist them. I can assure Senators Pearce and Millen that their good wishes for a pleasant Christmas and a happy and prosperous New Year are heartily reciprocated. I re-echo …- hope that when we meet again there will be a bright and cheery prospect before us, and that we shall be able to look back upon great achievements accomplished by our race during the interval, with the result that it will not in the future be called upon to face such trials as those to which it is subjected at the present time. I extend to the Ministry, the Leader of the Opposition, and every member of the Senate the most cordial greetings for the Christmas season, and I hope that we shall return rejuvenated at the close of the special adjournment. To come to purely official business, in view of the fact that it is impossible to say when the necessity for summoning Parliament together may arise, I should like honorable senators, if they are away from their usual place of residence during the adjournment to be careful to keep myself and the officers of the Senate informed of any change in their address, so that I may be able to communicate with them in the shortest possible space of time. If it should be necessary, I shall not only summon honorable senators by telegram, but if time permits I shall summon them by letter as well. In order that I may do so, I ask them to keep me informed of the address at which they can most readily be found during the adjournment. Question resolved in the affirmative.
Message received from the House of Representatives stating that it did not insist on the amendment disagreed to by the Senate, and had agreed to the consequential amendment made by the Senate.
Statement by Senator Senior: Purchase and Re-sale of Land for Rifle Range.
Motion (by Senator Pearce) proposed -
That the Senate do how adjourn.
– I am sorry to have to detain the Senate, even for a few seconds, but I feel that a statement having been made in the Chamber recently, and appearing on record in Hansard, I am justified, even at this late hour, in asking the attention of the Senate for a couple of minutes whilst I malco reference to it. The statement was made by Senator Senior that certain land in South Australia had been purchased by the Defence Department for the purpose of a rifle range, that on the land were several very valuable buildings, and that although the land and the buildings were entirely suitable for the purpose for which they had been bought, they were resold to a private individual for a sum much less than the value of them. The honorable senator went on to say that he was quite sure that a Labour Government would not have been guilty of this act of re-sale of land to a private individual. Senator Story affirmed - the statement is there in Hansard - that it must have been a Liberal Government which did it. The simple facts are that a previous Labour Government did purchase this land with its buildings for the State Government, but the area was greatly in excess of that which was required by the Defence Department. The State Government, however, would not sell a portion, and therefore the Defence Department had to purchase, during Senator Pearce’s previous term of office, the whole in order to obtain the portion it wanted, and so was left with an excess on its hands. Then the question of disposing of the excess came up, and it was finally determined by the Defence Department to surrender that portion, and the Department of Home Affairs was called upon to take action. Senator Senior’s statement was that the whole area had been resold for £1,000. I find that it was the surplus area only which was sold, and the decision to sell it was arrived at by Mr. King O’Malley, who was then Minister of Home Affairs. Applications were invited from persons willing to purchase, but there was no response to thf advertisements. A little later, offers were again invited - Mr. Kelly was then Assistant Minister - and an oner was received, which the Minister regarded as too low, and, as a consequence, other negotiations took place with the tenderer, who finally agreed to make his price £1,700. I only wish to say that the inaccuracies in the statement of Senator Senior, no doubt made without a full examination of the whole matter, do, as they are printed in Hansard, make it appear that there has been some wrong action on the part of the Defence Department. The disposal of that land had nothing to do with that Department, and the facts given by Senator Senior, are, as shown by the replies to my inquiries at the Department, totally inaccurate. It was not the whole of the land, but only the portion which the Department did not want which was sold, and the price obtained was £1,700, not £1,000.
– I wish to make a few comments on this case, because Senator Senior is not here to speak for himself. Senator Millen gave me a hint that he intended to speak on this matter by the fact that he asked the Department for certain information which was supplied to him by me. Seeing that Senator Senior had raised the question, I anticipated that Senator Millen would raise it too, and so I obtained the file. I find that part of the history given by Senator Millen is correct, and that the approval for the sale was given by Mr. Kelly. It is not, however, to be inferred that Mr. King O’Malley had given an indication that if that sum could be obtained he would approve of the sale. All that he had committed himself to was that the surplus land should be sold ; he had not committed himself to any price. Senator Senior’s remarks which I read in Hansard were rather directed to the assertion that the land had been sold for less than it is worth. I do not intend to read the file - it is here, and the remarks of the property officer are here. In justice to Senator Senior it ought to go on record that Mr. King O’Malley did not commit himself to any price. Mr. Kelly approved of the sale for £1,700, which was the offer of Elder Smith and
Company, and Senator Senior’s remarks were directed to the fact that the land was sold for lest, than its real worth.
– His statement was that we had sold the whole of the land which yon purchased. We did not sell it.
– I am not positive that he said that. Anyhow, whether he said that the Department sold the whole or a part, the purport of hia charge was that it was sold for- less than itsvalue, not simply that it was sold. I have read his remarks, and that is what he was driving at right through.
– He said - This area was particularly suitable for a rifle range, and the ‘Commonwealth Government acquired it for that purpose.
He was dealing with that area right through, and would have it appear that we had sold it.
– The paragraph quoted does not give the tenor of Senator Senior’s charge, which was that the land was sold for less than its value. I thought it was only fair, in his absence, that I should make this statement, without going more fully into the case.
Question resolved in the affirmative.
– The Senate stands adjourned until the 14th April, 1915, or to such earlier date as it may he summoned to meet, by the President by telegram or letter addressed to each senator.
Senate adjourned at 4.23 p.m.
Cite as: Australia, Senate, Debates, 18 December 1914, viewed 22 October 2017, <http://historichansard.net/senate/1914/19141218_senate_6_76/>.